CHAPTER
– 18
Middlemen
and Their Different Kinds
INTRODUCTION
“A business concern that is specialized in rendering services
immediately involved in the purchase or sale of the goods in the process of
distribution is known as middle man.”
There term middle man included all
those who operates between producer and consumers. They function in buying and
selling if the commodity. The wholesalers and retailers are middleman dealing
in the ordinary function of buying and selling. There are other such as
brokers. Commission agents, dealers and merchants who assist the buyers ans
sellers in the market.
KINDS OF
MIDDLEMEN
Some of the middle men are explained
as follow
1. BROKER
A broker is an agent involved to
buying and selling on behalf of principal for a commission. He does not hold
any stock nor deals with his own name. his function is only to negotiate and
make contract of sales and purchases on behalf of others. He is paid for his
labour called as brokerage. There are different classes of brokers. They are
produce broker, stock broker, insurance broker and ship broker.
2. FACTOR
He is an agent whose function is to
receive goods from his principal for sale in commission. He can sell goods in
his own name, pledge goods in his own possession receive payments and gives
receipts. He is liable on contract of sale he enters into on behalf of his
principal. A factor is also called a consignment broker.
3. COMMISSION
AGENT
He acts on behalf of foreign
importer. His function is to buy goods on behalf of client abroad and to
dispatch them in accordance with the instructions. He receives a commission for
his service.
4.
UNDERWRITER
They enter into agreement with
promoters of newly started company which have not been taken up by the public.
For this guarantee they are paid commission known as underwritten commission.
5.DEL CREDERE
AGENT
He is an agent who in consideration
for extra remuneration called del credere commission. Guarantees to his
principal that the third person with whom he enters into contracts shall
perform their obligation. Thus such an agent guarantees to his principal that
he will only sell to person who will pay for what they buy and if the buyer
does not pay, he will pay.
6. TRAVELLING
AGENT
Sometimes wholesalers appoints number
of agents who goes from place to place , show catalogues, price lists etc. to
retailers , book orders and forward them to their principals who executes them.
They receive their commission in return of their service.
7. SELLING
AGENT
Sometimes wholesalers and
manufactures appoints certain shop-keepers in different parts of the country as
their selling agents. These agents receive commission on all sales in addition
to the expenses which they have incurred on behalf of principal.
8.
AUCTIONEERS
An auctioneer is an agent who sells
goods by auction ie to the highest bidder in public competition. He has no
authority to hold the goods sold and can deliver the goods only on receipt of
price. He is the agent of the vender.
9. FORWARDING
AGENT
This is the type of agent who is
engaged in forwarding the goods to there destination on certain charges.
10. CLEARING AGENT
This agent is involved in clearing
the imports on behalf of their principal. The duties include taking the
delivery of the goods from the ship and attending to custom formalities for
certain commission.
DISTINCTION
BETWEEN FACTOR AND BROKER
Factor
1. He has the possession of goods or documents which entitle him to the possession.
2. He carries out the trade with his name.
1. He has the possession of goods or documents which entitle him to the possession.
2. He carries out the trade with his name.
3. He is himself liable in respect of
the contract of sale.
4. He receives payment from the customer
and gives him discharge.
5. He has lion in respect on goods in
respect of his commission. Broker
Broker
1. He has no possession of the goods which he sells.
1. He has no possession of the goods which he sells.
2. He brings together both the
parties to a transaction. The sale is made in the name of the principal.
3. He is not liable in respect of
such contracts.
4. He does not receive payment of the
value of the goods from the customer
and cannot give his discharge.
5. He has lien on goods.
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